Core Viewpoint - ServiceNow is expected to report strong first-quarter 2025 results, with significant revenue and earnings growth driven by subscription services and AI advancements [1][3][4]. Revenue and Earnings Estimates - The Zacks Consensus Estimate for first-quarter revenues is $3.08 billion, reflecting an 18.37% increase year-over-year [1]. - The consensus estimate for earnings is $3.79 per share, indicating an 11.14% growth from the previous year [1]. - Subscription revenues are projected between $2.995 billion and $3 billion, suggesting an 18.5-19% year-over-year improvement [3]. Subscription Revenue Growth - The Zacks Consensus Estimate for subscription revenues is $2.997 billion, indicating an 18.8% year-over-year growth [4]. - ServiceNow's new Yokohama platform is expected to enhance productivity and streamline workflows, contributing to subscription revenue growth [4][16]. Customer Growth and AI Integration - ServiceNow ended Q4 2024 with 2,109 customers, representing a 14% year-over-year increase in customers with over $1 million in annual contract value [5]. - The company is leveraging AI and machine learning technologies to enhance its solutions, which is expected to attract more clients [16]. Market Performance - ServiceNow shares have declined 27.1% year-to-date, underperforming the Zacks Computer & Technology sector and the Computers – IT Services industry [6][9]. - Despite the decline, ServiceNow shares returned 7% on a trailing 12-month basis, outperforming the sector's return of 2.8% [9]. Strategic Partnerships - ServiceNow has expanded partnerships with major companies like Google Cloud, NVIDIA, and DXC Technology to enhance its offerings and market reach [17][18][19]. - The collaboration with NVIDIA focuses on integrating advanced AI capabilities into ServiceNow's platform [18]. Challenges and Concerns - The company anticipates a $175 million unfavorable forex impact for 2025, which may affect subscription revenue growth [20]. - Tariff-related issues and a challenging macroeconomic environment are also expected to impact the federal business [9][20]. Conclusion - ServiceNow's strong AI portfolio and partnerships are expected to drive long-term subscription revenue growth, despite facing forex challenges and a stretched valuation [21].

Core Viewpoint - ServiceNow's stock has experienced a significant decline, dropping over 35% from its peak earlier this year, and is now in a bear market, with expectations for upcoming financial results [1][4]. Company Overview - ServiceNow is a leading technology company in the U.S., specializing in a cloud-based platform for IT Service Management (ITSM), focusing on automating workflows for IT services, customer services, and low-code development [2]. - The company serves thousands of clients globally, including major firms like Accenture, Adidas, Amazon, Walmart, Apple, and Vodafone Group [3]. Financial Performance - ServiceNow's annual revenue has increased from $4.5 billion in 2020 to over $10.98 billion projected for 2024, indicating strong business growth [3]. - Analysts anticipate a revenue increase of 18.5% to $3.09 billion for the upcoming financial results, with an expected earnings-per-share (EPS) of $3.83, up from a previous estimate of $3.41 [4][5]. Valuation Metrics - Concerns regarding ServiceNow's valuation persist, with a current price-to-earnings (P/E) ratio of 112.8, down from a high of 179 last year, and a forward P/E ratio of 95.7, significantly above the sector median of 23.2 [6]. - Compared to other SaaS companies, ServiceNow's valuation appears high, with Adobe, Microsoft, and Salesforce having forward P/E multiples of 21, 28, and 22, respectively [7]. Growth and Profitability - ServiceNow's revenue growth rate is approximately 21%, with a net profit margin of 16%, resulting in a rule-of-40 metric of 38%, suggesting the stock may be slightly overvalued [8]. - However, when considering its free cash flow (FCF) margin of 37%, the overall valuation may not be excessively high [8]. Stock Price Analysis - The stock price has fallen from a high of $1,196 in January to around $722, forming a double-top pattern that indicates a potential downturn [10]. - A death cross has formed, indicating bearish sentiment, and the stock is expected to continue declining post-earnings, with an initial target of $680 [11].

Core Viewpoint - ServiceNow's stock faced downward pressure following two consecutive price target cuts by analysts, leading to a more than 3% decline in share price while the S&P 500 saw a slight gain [1]. Analyst Price Target Cuts - Deutsche Bank analyst Brad Zelnick reduced his price target for ServiceNow from $1,300 to $1,050 but maintained a buy recommendation [2]. - TD Cowen analyst Derrick Wood also cut his target from $1,300 to $1,100, while keeping his buy recommendation intact [3]. Reasons for Price Target Adjustments - Zelnick's reasons for the price target cut were not immediately clear, while Wood cited concerns over the impact of the Trump administration's Department of Government Efficiency (DOGE) initiative on ServiceNow's public-sector business [4]. Market Sentiment and Upcoming Earnings - The market is showing nervousness ahead of ServiceNow's upcoming earnings release, scheduled for April 23, with analysts expecting year-over-year growth in revenue and profitability [5]. - Consensus estimates for revenue and earnings per share are $3.09 billion and $3.83, representing year-over-year improvements of 19% and 12%, respectively [5]. Long-term Outlook - Despite potential challenges in the government sector, ServiceNow's success in the private sector suggests a positive long-term outlook for the company [6].

Core Insights - ServiceNow (NOW) is expected to report quarterly earnings of $3.79 per share, reflecting an 11.1% increase year over year, with revenues projected at $3.08 billion, indicating an 18.4% growth compared to the previous year [1] - Analysts have revised the consensus EPS estimate down by 0.7% over the last 30 days, indicating a reevaluation of initial projections [1][2] Revenue and Profit Metrics - The estimated revenue from 'Professional services and other' is projected to be $84.10 million, a 5.1% increase from the prior year [4] - The 'Subscription' revenue is expected to reach $3.00 billion, representing an 18.8% year-over-year growth [4] - Current Remaining Performance Obligations (cRPO) are anticipated to be $10.10 billion, up from $8.45 billion a year ago [4] - Remaining Performance Obligations (RPO) are forecasted to be $21.42 billion, compared to $17.7 billion in the same quarter last year [5] - Gross Profit (Non-GAAP) from Subscription services is expected to be $2.51 billion, an increase from $2.16 billion year over year [5] - Gross Profit (Non-GAAP) from Professional services and other is projected at $10.12 million, down from $13 million a year ago [6] Stock Performance - Over the past month, ServiceNow shares have declined by 5.6%, while the Zacks S&P 500 composite has decreased by 6.3% [6] - ServiceNow holds a Zacks Rank of 3 (Hold), suggesting that its performance is likely to align with the overall market in the near term [6]

Core Insights - NowVertical Group Inc. has launched its flagship DataCatalyst Solution on the Microsoft Azure Marketplace, enhancing its strategic positioning in enterprise AI and data infrastructure modernization [1][3] - DataCatalyst is designed to unify, enrich, and operationalize enterprise data, significantly reducing time-to-value on data products by up to 50% and integration costs by up to 30% [2][3] - The launch responds to the demand for AI enablement, addressing challenges such as fragmented systems and poor data quality that hinder companies from realizing meaningful ROI from AI initiatives [3] Company Overview - NowVertical is a global data and analytics company that transforms data into business value using AI, offering a comprehensive suite of solutions and services [4] - The company has established a Microsoft Center of Excellence, comprising over 50 certified Azure professionals, and has completed over 50 large-scale Azure-based projects for enterprise clients [3][4] - NowVertical aims to help enterprises optimize decision-making, improve operational efficiency, and unlock long-term value from their data through AI-infused technologies [4]

Companies are racing to build the most advanced AI infrastructure. The growth in AI spending more than doubled Nvidia's data center revenue last year, and it ended the year with strong momentum. Leading cloud service providers drive about half of Nvidia's data center revenue. It's seeing growing demand from regional cloud hosting providers as companies prepare to launch more advanced AI reasoning models. Agentic AI models that are able to reason and perform tasks without human input will require exponential ...

My last article about ServiceNow (NYSE: NOW ) (NEOE: NOWS:CA ) on January 21, 2025, downgraded the company to a hold due to short-term valuation concerns. Shortly after I made that call, the stock dropped 27.20%, compared to the S&PI have been a Merchant Seaman that has traveled the world for over 30 years. Within the last 15 years, I developed a very intense interest in investing. I learned a lot of what I know about investing from The MF. Also because I have a engineering background, I often tend to gravi ...

Core Viewpoint - ServiceNow's stock is experiencing upward movement despite recent price target reductions from two investment firms, indicating investor confidence in the company's potential for growth [1][2][3]. Group 1: Analyst Updates - Oppenheimer has lowered its price target for ServiceNow from $1,200 to $970 per share, citing expectations for solid Q1 reports that may exceed Wall Street's forecasts, but also noting macroeconomic and geopolitical risks that could weaken demand in the enterprise software market [2]. - Bank of America has reduced its price target from $1,280 to $1,025 per share while maintaining an outperform rating, expecting year-over-year growth for remaining performance obligations (RPO) in Q1 to align with a previous target of 20.5% [3]. - Bank of America has also adjusted its full-year RPO growth target from 21% to 19.5% on a constant-currency basis due to a softer demand outlook [3]. Group 2: Market Potential - Oppenheimer's new price target suggests an upside potential of approximately 19% for ServiceNow's stock [4]. - Achieving Bank of America's revised target would imply a potential increase of around 26% from the current valuation level [4]. Group 3: Risks and Strengths - Macroeconomic and geopolitical risks may pose challenges for ServiceNow, potentially affecting its valuation and the broader market [5]. - Despite these risks, the company's strength in enterprise artificial intelligence (AI) software positions it as a potential long-term winner in the market [5].

For Immediate ReleasesChicago, IL – April 15, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include ServiceNow (NOW) , Alphabet (GOOGL) , NVIDIA (NVDA) and DXC Technology (DXC) .Here are highlights from Tuesday’s Analyst Blog:ServiceNow shares have plunged 25.9% year to date, underperforming both the Zacks Computer & Te ...

ServiceNow (NOW) shares have plunged 25.9% year to date, underperforming both the Zacks Computer & Technology sector and the Zacks Computers – IT Services industry’s decline of 14.4% and 18.9%, respectively.NOW shares have suffered from a worsening macroeconomic environment following U.S. President Donald Trump’s decision to levy tariffs on trading partners, including China and Mexico. The company’s federal business is expected to suffer from DOGE related issues. ServiceNow expects unfavorable forex impact ...